Council Directive 2000/17/EC of 30 March 2000 amending Directive 77/388/EEC on the common system of value added tax - transitional provisions granted to the Republic of Austria and the Portuguese Republic
Date: 2000-03-30
Institutions: Council of the European Union
Subjects: Austria, Portugal, VAT, improvement of housing, real property, tax harmonisation

L 84/24

EN

Official Journal of the European Communities

5.4.2000

COUNCIL DIRECTIVE 2000/17/EC

of 30 March 2000

amending Directive 77/388/EEC on the common system of value added tax — transitional provi-
sions granted to the Republic of Austria and the Portuguese Republic

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 93 thereof,

(6)

Having regard to the proposal from the Community,

Having regard to the opinion of the European Parliament (1),

Having regard to the opinion of the Economic and Social
Committee (2),

Whereas:

(1)

(2)

(3)

(4)

(5)

Point 2(e) of Part IX ‘Taxation’ of Annex XV to the 1994
Act of Accession authorised the Republic of Austria to
derogate from Article 28(2) of sixth Council Directive
77/388/EEC of 17 May 1977 on the harmonisation of
the laws of the Member States relating to turnover taxes
— common system of value added tax: uniform basis of
assessment (3), (hereinafter referred to as the ‘sixth VAT
Directive’) and to apply a reduced rate to the letting of
immovable property for
residential use until 31
December 1998, provided that the rate was not lower
than 10 %.

Under Article 13(B)(b) of the sixth VAT Directive, the
letting of
immovable property for residential use in
Austria has been exempt from VAT since 1 January
1999 without the right to deduct input tax. However,
under Article 13(C)(a) of that Directive, Austria may
allow taxpayers the right to opt for taxation. In that
case, the normal VAT rate and the normal rules for the
right to deduction apply.

The Republic of Austria considers that the measure is
still essential, mainly because the transitional VAT
regime is still in force and the situation has not really
changed since the negotiation of the 1994 Act of Acces-
sion.

The Republic of Austria also considers that dispensing
with the reduced rate of 10 % would inevitably lead to
an increase in the price of immovable property rental for
the final consumer.

The Portuguese Republic applied a reduced rate of 8 %
to restaurant services as at 1 January 1991. Under
Article 28(2)(d) of the sixth VAT Directive, Portugal was
permitted to continue applying that rate. However, after
a comprehensive amendment of the rates and for polit-

(1) Opinion delivered on 15 March 2000 (not yet published in the

Official Journal).

(2) OJ C 75, 15.3.2000, p. 21.
(3) OJ L 145, 13.6.1977, p. 1. Directive as last amended by Directive

1999/85/EC (OJ L 277, 28.10.1999, p. 34).

ical and budgetary reasons, restaurant services were
made subject to the normal rate from 1992.

The Portuguese Republic wishes
to reintroduce a
reduced rate on these services on the basis that main-
taining the normal rate had adverse consequences,
in
particular job losses and an increase in undeclared
employment, and that application of the normal rate
increased the price of restaurant services for the final
consumer.

As the derogations in question concern supplies of
services within a single Member State, the risk of distor-
tion of competition can be considered non-existent.

In these circumstances, return to the previous situation
may be considered for both the Republic of Austria and
the Portuguese Republic, provided that application of
the derogations is limited to the transitional period
referred to in Article 281 of the sixth VAT Directive.
However, the Republic of Austria must take the neces-
sary steps to ensure that the reduced rate has no adverse
effects on the European Communities' own resources
accruing from VAT, the basis of assessment for which
must be reconstituted in accordance with Regulation
(EEC, Euratom) No 1553/89 (4),

(7)

(8)

HAS ADOPTED THIS DIRECTIVE:

Article 1

The following points shall be added to Article 28(2) of the
sixth VAT Directive:

‘j)

the Republic of Austria may apply one of the two
reduced rates provided for in the third subparagraph of
Article 12(3)(a) to the letting of immovable property
for residential use, provided that the rate is not lower
than 10 %;

k) the Portuguese Republic may apply one of the two
reduced rates provided for in the third subparagraph of
Article 12(3)(a) to restaurant services, provided that the
rate is not lower than 12 %.’

Article 2

The Member States referred to in Article 1 shall bring
1.
into force the laws, regulations and administrative provisions
necessary to comply with this Directive. They shall forthwith
inform the Commission thereof.

(4) OJ L 155, 7.6.1989, p. 9.

5.4.2000

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Official Journal of the European Communities

L 84/25

When the Member States adopt these measures, they shall
contain a reference to this Directive or shall be accompanied by
such a reference on the occasion of their official publication.
The methods for making such a reference shall be laid down by
the Member States.

2.
The Member States referred to in Article 1 shall commu-
nicate to the Commission the text of the provisions of national
law which they adopt in the field governed by this Directive.

Article 3

This Directive shall enter into force on the day of its publica-
tion in the Official Journal of the European Communities.

It shall apply as from 1 January 1999 until the end of the
transitional period referred to in Article 281 of the sixth VAT
Directive.

This Directive is addressed to the Member States.

Article 4

Done at Brussels, 30 March 2000.

For the Council

The President

J. SÓCRATES